Facebook shares soar as revenue beats expectations

Facebook Inc reported a far better-than-expected 51.7 per cent jump in revenue for the final quarter of 2015 as new advertising formats and an improved mobile app drove a sharp rise in ad sales, sending its shares soaring in after-hours trading.

The company's total revenue rose to $US5.84 billion ($8.3 billion) from $US3.85 billion a year earlier, with ad revenue increasing 56.8 per cent to $US5.64 billion in the holiday shopping period, when spending on advertising typically spikes.

Social media diverts your time and attention away from producing work that matters and towards convincing the world that you matter. Photo: Reuters

Facebook, whose shares were up 7.5 per cent in extended trading on Wednesday, said mobile ads accounted for 80 per cent of total ad revenue in the quarter, compared with about 78 per cent in the third quarter and 69 per cent a year earlier.

"It's much stronger ad growth than we were expecting," said Ken Sena, an analyst at Evercore ISI.

Facebook's Mark Zuckerberg will be one of the media luminaries at the event. Photo: AP

"It signifies the importance of what they're providing to advertisers," he said. "They're providing a very efficient method of distribution for them, they're making big investments and evidenced by their quarterly performance it seems to be working."

The company, which has the world's most popular smartphone app, has also been benefiting from a surge in video views that has attracted advertising dollars.

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Facebook said it had 1.59 billion monthly active users as of December 31, up 14 per cent from the end of 2014.

Of those, 1.44 billion used the service on mobile devices, an increase of 21 per cent.

Analysts had expected the company to report 1.58 billion monthly active users, with 1.43 billion accessing the service through smartphones and tablets, according to market research firm FactSet StreetAccount.

BIg bets

Net income attributable to common shareholders rose to $US1.56 billion, or 54 cents per share, in the three months ended December 31 from $US696 million, or 25 cents per share in the same period of 2014.

Excluding items, the company earned 79 cents per share. Analysts on average had expected earnings of 68 cents per share and revenue of $US5.37 billion, according to Thomson Reuters I/B/E/S.

"It's phenomenal at these (currency headwind) levels that they're accelerating to that level of growth," said Rob Sanderson, an analyst at MKM Partners.

"I don't think there's going to be too many people crying for them to start monetizing other properties anytime soon because the core business is so strong."

Apart from focusing on mobile, Facebook has been ramping up spending on several "big bets," including virtual reality, artificial intelligence and drones to connect the remotest parts of the world to the Internet.

The company has also begun monetising some of its other units, such as photo-sharing app Instagram, which surpassed 400 million users last year and began selling ads in September.

In January, Facebook also began taking orders for a consumer version of the Oculus Rift, a head-mounted virtual reality unit.

Chairman and Chief Executive Mark Zuckerberg, who returned from two months of paternity leave on Monday, has said virtual reality represents the next major computing platform.

Up to Wednesday's close of $US94.45, Facebook's stock had risen nearly 25 per cent in the past 12 months.